Mishawaka couple in court on fraud charges

Judge cites complexity of case in setting May 1 trial date.

Judge cites complexity of case in setting May 1 trial date.

July 21, 2006|JEFF PARROTT Tribune Staff Writer

SOUTH BEND -- A Mishawaka couple charged with defrauding investors of millions of dollars appeared in federal court for the first time Thursday. Accompanied by his wife, Marietta, 68, and their two attorneys, 71-year-old Thomas Squibb appeared frail and walked slowly into U.S. District Judge Allen Sharp's courtroom. The retirees pleaded not guilty to 20 counts of mail and wire fraud, and conspiracy to commit those crimes. If convicted on all counts, they could face a maximum sentence of 385 years in prison, but U.S. Attorney Joseph Van Bokkelen has said he likely would pursue a sentence closer to 10 years. Several alleged victims who attended the hearing said they don't care whether the Squibbs spend a day in prison. They just want their money back. "I'm not vindictive or anything," said Jack Ruhe, who lived next door to the Squibbs in Winding Brook for 12 years. "It's sad, not only for the investors but for him and his family." Prosecutors allege the Squibbs owe at least 60 investors, most of them elderly, more than $3 million. For at least a decade, the couple collected millions of dollars from friends, family, neighbors and associates, telling them their capital would be used to develop KOA campgrounds in Michigan and condominiums in Florida, prosecutors charge. But the projects never existed, prosecutors say. The alleged scheme began to unravel late last year when investors stopped receiving the lucrative interest payments on promissory notes the Squibbs had issued them. Under such "Ponzi" schemes, sometimes called "pyramid" schemes, money from new investors is used to pay off previous investors. But the scheme inevitably collapses when the operator runs out of new investors. Ruhe, a Saint Mary's College professor, declined to say how many thousands of dollars he has lost, but said it hasn't ruined him. "I'll be OK," he said. "I'm still working. The interesting thing is I teach business ethics at Saint Mary's so I should know better. But when you're dealing with people you have known for so long ... Trust, it's the basis of all business dealing. Without trust, we are in a world of trouble." Because the case is so complex, Sharp did not set the trial to begin until May 1. He gave the defense until Oct. 10 to file any motions, and prosecutors will have until Nov. 27 to respond. Meanwhile, the Squibbs are free on bond. They declined comment after the hearing. Thomas Squibb's attorney, Len Zappia, said they were not surprised by the indictment. "We've been working with the federal government for several months now," Zappia said. "We've tried to cooperate, and they have treated us very well. We just have a different version of the facts." Zappia called the government's $3 million figure "inflated," but said he does not know how much money the Squibbs owe investors, or what they might have done with it. After months of seeing other investors file civil lawsuits in thus-far fruitless efforts to recoup their losses, alleged victim Joe Kolo said he is glad to see the criminal case finally moving. He thinks Sharp should let the Squibbs, who have custody of two high school-age granddaughters they adopted, avoid prison if they can afford to pay their alleged victims restitution. "I have no malice toward him," Kolo said of Thomas Squibb. "In my heart I can forgive him but I feel sorry for the people he has taken advantage of." Staff writer Jeff Parrott: jparrott@sbtinfo.com (574) 235-6320